Rampant dysfunction currently plagues the Internet’s root zone where a predatory monopolist has captured ICANN and is bullying stakeholders. This harms the public interest and must be addressed—here’s how.

Introduction: How To Save The Internet In 3 Simple Steps

In the world of ICANN and Internet policy, complexity is manufactured to create an illusion that issues are impenetrably technical such that normal and everyday principles can’t apply. This causes a pervasive and entrenched phenomenon of eyes that glaze over at the mere mention of the word “ICANN”—including those of government regulators and other officials that might otherwise take more of an active interest. Thus, only rarely does anyone attempt untangling one of the messy issues impacting Domain Name System (DNS) governance that often resemble a Gordian knot. Instead, most take a leap of faith by entrusting matters to ICANN along with its contracted parties and other stakeholders before finding something else to do.

Untangling these Gordian knots—and there are more than one—requires an accurate understanding of what is going on in an interconnected web of intrigue with many moving parts and different players. Today, the Internet’s root zone, like a failed state, is dominated by predatory corporate warlords intent on maximizing control of Internet infrastructure that they don’t own but which they feel entitled to. Their pursuit of this anticompetitive aim has thoroughly corrupted the entire DNS ecosystem and is normalized as the status quo.

Some argue for replacing ICANN with a new organization created by an amorphous “global community of stakeholders.” However, this is dangerously naive at best because the exact same fate would likely befall any successor to ICANN if what causes the dysfunction isn’t fixed first. A much darker view recognizes that, since the IANA transition, certain interests with their own agendas have loosely aligned around the common goal of a root zone that is beyond U.S. jurisdiction. This should raise questions, if not outright suspicions, about whether governance dysfunction is being purposely exacerbated towards a full-blown crisis that can be exploited to achieve the aim of these inimical interests.

The possibility that this theory is even partially true adds to the impetus for addressing the corruption, dysfunction, and capture that makes the Internet’s root zone resemble a failed state. Doing so requires a reboot of the Internet’s root that restores governance back within design parameters by properly implementing privatization while also resetting certain areas where non-standard deviations are causing harmful downstream effects. At a minimum, such a reboot must:

1. Undo Amendment 35 of the NTIA-Verisign Cooperative Agreement;
2. Delete Presumptive Renewal From Legacy Registry Agreements;
3. Open the Internet’s Largest Registry to Market Competition.

Necessarily, this is an ambitious agenda—so let’s pop the hood and take a closer look at how to save the Internet in three simple steps.

Ctrl-Z: Undo Amendment 35 of the NTIA-Verisign Cooperative Agreement

The cooperative agreement—which was first signed by the U.S. government and Network Solutions, Verisign’s predecessor-in-interest, in 1993—is a foundational document of Internet governance and the legal instrument by which the U.S. government delegates key management functions of the Internet’s DNS to the private sector. It has been amended thirty-five times, most recently in October 2018, when the U.S. Commerce Department exercised a unilateral renewal option while also approving transformative modifications to the agreement that singularly benefit Verisign at the expense of the public interest.

First and foremost, Amendment 35 removed an essential pricing safeguard that was implemented in 2012 and capped the maximum price that Verisign could charge for .com domain names at $7.85. This price restriction—which protected .com domain name registrants from arbitrary and excessive price increases by Verisign—resulted from the findings and recommendations of a 2012 empirical review of .com’s market power conducted by the U.S. Justice Department.

Oddly, the Commerce Department’s decision to remove the pricing safeguard wasn’t based on updated empirical findings from the Justice Department, which hasn’t conducted any formal competition review of .com since 2012. The absence of any updated review is conspicuous, particularly because it ignores at least one Congressional request for an updated review, dating from 2016, and also contradicts the Justice Department’s own expectations regarding the cooperative agreement and assurances that were provided to Congress, also in 2016.

The consequences of the Commerce Department’s decision to remove this essential consumer protection became clear in short order when ICANN disregarded an unprecedented outpouring of more than 9,000 public comments unanimously opposing any increase in .com pricing and, instead, sold pricing power to Verisign for $20 million.

The removal of such an essential consumer safeguard without any empirical basis for doing so harms the public interest. But Amendment 35 makes other changes to the cooperative agreement that fundamentally transform the nature of the relationship between the U.S. government and Verisign. The most problematic of these is that Amendment 35 makes any future amendment of the cooperative agreement—including any potential regulatory action—subject to mutual consent of both parties. This means that reinstating the pricing safeguard would require Verisign’s consent, and the likelihood of this happening is between slim and none—and slim just left town.

The troubling terms of Amendment 35, however, aren’t nearly as disturbing as the process by which it was allegedly approved. According to sources, former Secretary of Commerce Wilbur Ross sidelined the responsible agency, the National Telecommunications and Information Administration (NTIA), and personally directed the cooperative agreement renewal and Amendment 35.

On September 19, 2018, Secretary Ross met privately in his office with then-NTIA Administrator David Redl. During this brief meeting, Secretary Ross is alleged to have handed Redl a document containing the text of what later became Amendment 35 and instructed him to amend the cooperative agreement with the provided text without any further modification or review. Sources have further alleged that Secretary Ross received the document that was provided to Redl while attending a dinner function the prior evening at which other senior government officials, including the Secretary of State, were also present.

Although sources did not identify the person or persons that allegedly gave the document to Secretary Ross, publicly-available official records from the Commerce Department and NTIA confirm that the private meeting with Redl took place as described as well as the dinner function the night before. These allegations, along with the corroborating official records, suggest that improper political interference occurred that involved the highest levels of the Commerce Department, including the Secretary. If true, this would explain how Amendment 35—truly a terribly awful deal—came to be approved. At a minimum, much greater scrutiny is needed that can shed light on the circumstances surrounding Amendment 35.

Notwithstanding the veracity of these allegations, the government should ask a federal judge to nullify Amendment 35 to the cooperative agreement with Verisign, pursuant to the Administrative Procedures Act. The terms of the amendment are anathema to the public interest and hamstring the government from effectively protecting consumers and the broader public interest. Also, Congress wasn’t consulted, and the timing of the amendment—which was signed a month early at the end of October while Congress was in recess for the 2018 mid-term election—raises concerns about whether Congress was deliberately kept in the dark in order to avoid oversight.

The result is a deal that lopsidedly benefits Verisign at the expense of, literally, everyone else. Accordingly, the new Administration should prioritize the interests of DNS stakeholders, .com registrants, and fans of good government by hitting Ctrl-Z to undo Amendment 35 so that it can be replaced with an amendment that adheres to proper procedures, relies on a full and updated empirical review of the market power of .com, and, most importantly, benefits the public interest.

Stay tuned for Part 2—Delete Presumptive Renewal From Legacy Registry Agreements—Coming Soon!